The Supreme Court reiterated that every director connected with a company could not be held liable in a case of cheque which was dishonored for want of sufficient funds in the bank. Only those who were in charge of and responsible for the conduct of the business of the company at the time of the offense under Section 138 of the Negotiable Instruments Act will be liable for criminal action, the court said in the case, National Small Industries Corporation vs Harmeet Singh. A mere bald statement that a particular director among many was responsible for the conduct of the business would not be sufficient to clamp vicarious liability on him.
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